Indo-Lanka CEPA
Sri Lanka and
India are due to sign the long-awaited Comprehensive Economic
Partnership Agreement (CEPA) on the sidelines of the South Asian
Association for Regional Cooperation (SAARC) Summit next month
in Colombo. Coming more or less 10 years after the
groundbreaking Indo-Lanka Free Trade Agreement, the CEPA marks
yet another milestone in the very close relationship between the
two countries.
The FTA was a first for both India and Sri Lanka. The latter
has gone on to sign a similar pact with Pakistan while the CEPA
with the Sri Lanka is only the second such agreement for India.
This proves that both countries are very keen to consolidate
their trade ties within the SAARC structure.
The FTA can be a gauge for measuring the potential success of
the CEPA which has come to fruition after three years of
negotiations at the top level.
Sri Lanka’s trade volume with India has seen a rise to US$
516 million from a paltry US$ 49 million at the start of the
pact.
India’s trade volume with Sri Lanka now stands at US$ 2.7
billion (2007) from US$ 549 million in 1999. Sri Lanka hopes to
raise her volume of trade with the giant neighbour to US$ 1.5
billion by 2012.
These are by no means insignificant figures and the CEPA will
augment the existing trade patterns between the two SAARC
nations. In fact, it was disclosed yesterday that India has
agreed to grant more concessions for garment imports from Sri
Lanka.
The three million pieces quota allowed under the FTA will be
increased to six million on a duty free basis while another two
million pieces will receive 75 per cent Margin of Preference
without restrictions on sourcing of fabrics.
We hope that these steps would help bridge the gap between
the trade volumes, which is still in favour of India. The
reduction of the negative lists proposed under the CEPA will
help this endeavour. Furthermore, many more Indian companies are
investing in Sri Lanka.
Indo-Lanka ties have reached a zenith in recent times, with
closer cooperation in virtually all spheres. President Mahinda
Rajapaksa is due to visit India before the SAARC Summit for
discussions with Indian leaders.
Such visits by the Heads of State and Foreign Ministers have
been a common feature in the excellent relationship between the
two neighbours.
Apart from SAARC, Sri Lanka and India are members of several
other blocs including BIMSTEC which is currently holding a
summit in Dhaka. The two countries have been pursuing a common
agenda at these fora.
People-to-contact is also gaining due attention, with Sri
Lanka already granting visa-free travel to Indians. This has
resulted in an influx of Indian tourists to the country. India
is reported to be considering reciprocating this gesture. The
emergence of low-cost carriers and the liberalisation of air
routes have also helped this cause.
India is also taking a tough line against LTTE terrorism
mainly due to increased Tiger activity in the Southern States.
Tamil Nadu Police have apprehended a large number of LTTE cadres
and sympathizers, both Sri Lankan and Indian. Increased
surveillance by Indian and Lankan Navies has thwarted many
attempts by the LTTE to smuggle weapons and ammunition in both
directions.
The two countries have also been able to resolve issues
pertaining to poaching by fishermen from both countries in each
other’s territorial waters on many occasions. There are some
outstanding cases, but one has to understand that the LTTE is
known to use fishing trawlers for gun-running and human
trafficking.
India’s assistance will be vital in resolving the conflict in
Sri Lanka. India has unequivocally committed itself to ensuring
Lanka’s sovereignty and territorial integrity. Sri Lankan
leaders have kept Indian leaders apprised of the latest
developments in the quest for resolving the conflict. Moreover,
there are many things we can learn from India in terms of ethnic
assimilation.
The CEPA will thus be a landmark in the centuries-old ties
between the two countries. When fully implemented it will lead
to a win-win situation for both countries. The full
operationalisation of the SAARC free trade arrangements in the
near future will make it even more meaningful and effective in
the SAARC context. |